WASHINGTON – OxyContin manufacturer Purdue Pharma is reportedly weighing a bankruptcy filing after most of its profits ended up in the pockets of the Sacklers, the multibillion-dollar family who control the company, according to sources cited by The Wall Street Journal.
The drug company is working with restructuring experts for a potential bankruptcy filing, people familiar with the matter said, Reuters first reported Monday.
Sackler family members, including former president Richard Sackler, own the company through trusts and controlled its board for years, according to The WSJ. Now Purdue Pharma’s assets may not be enough to cover its potential liability in lawsuits brought by roughly 1,600 cities, counties and states.
OxyContin was Purdue Pharma’s largest revenue stream with $35 billion in sales between 1995 and 2015. It helped make the Sacklers the 19th-richest family in the U.S. with an estimated $13 billion net worth, according to Forbes. A 2017 investigation by TheDCNF found no evidence the Sackler family was using its vast personal wealth to help recovering opioid addicts.
If Purdue Pharma files for Chapter 11 protection, the litigation against it would be halted and the drug company could negotiate with plaintiffs under a U.S. bankruptcy judge’s supervision, reported Reuters.
Other companies including USA Gymnastics, facing a scandal with former team doctor Larry Nassar, and California’s utility PG&E Corp. have filed for bankruptcy protection to cope with potential liability, reported The WSJ.
Right now, Purdue and other companies involved in multidistrict litigation, meaning they’re in settlement talks overseen by Ohio U.S. District Judge Dan Polster. The talks deal with hundreds of opioid-related lawsuits filed in federal court, reported The WSJ. Thirty-six states including Oklahoma and Massachusetts have sued Purdue outside of the multidistrict litigation.
The company denies the allegations, such as those in Massachusetts Attorney General Maura Healey’s suit alleging the company misled doctors and patients about the risks of opioids to increase prescriptions.
“They don’t want to accept blame for this. They blame doctors, they blame prescribers and worst of all, they blame patients,” Healey told CBS News in January.
Her remark was likely targeted at a previously unseen email from Richard Sackler, then-president of Purdue Pharma. Many communications by company executives were revealed in January in a 312-page filing by Healey’s office.
“[W]e have to hammer on abusers in every way possible,” Sackler wrote in a 2001 email quoted in the filing. “They are the culprits and the problem. They are reckless criminals.”